Medicaid Battle Heard Before The SD Supreme Court

Before he died he wrote his wife, who was in a nursing home, out of his will.

An attorney for the estate of a Fairfax, South Dakota man told the Supreme Court on Wednesday, the maneuver was made because Eugene Shipman had spent his wife's inheritance on her care in his final years.

But attorneys for South Dakota argue it was a move to get taxpayers to pay the bill.

The South Dakota Supreme Court is being asked whether it's okay to write an ailing wife out of a will and let the state Medicaid program pay for her nursing home care.

"The estate is trying to shift the cost of Arline's need to the taxpayers through Medicaid. That's not fair," Special Assistant South Dakota Attorney General Jeremy Lund said.

Lund told the court that before Eugene died in the summer of 2010, Medicaid started paying for his wife Arline's nursing home bill. She had been a resident of the nursing home for two years and Medicaid had originally denied paying for her care. But then the couple spent down their resources and Eugene wrote her out of the will.

"I believe that the effort was to disinherit the spouse in order to preserve the assets of the estate to go to the heirs," Lund said.

An attorney for Eugene told the court that he took care of his wife before she entered the nursing home.

"We do know he spent time and money caring for her. Then he spent time and his own personal resource after she got into the nursing home before he ever made an application," Shipman's attorney Jack Gunvordahl said.

The attorney says Shipman also paid his wife's nursing home bill for two years before Medicaid picked up the tab, effectively spending her inheritance while he was still alive.

"What we're saying is money that was used for her care is part of her estate and her estate was used up in caring for her so she shouldn't be entitled to double dip," Gunvordahl said.

Attorneys for the state argue that this case is so important because they want to send the message that Medicaid should not be relied upon when people are making estate plans.